ARONSON, J.
Appellant C. Tucker Cheadle (Cheadle), as administrator of the estate of Robert F. Obarr (Obarr), appeals from an order denying his motion to disqualify counsel for respondent DP Pham LLC (Pham). Cheadle contends disqualification was required because Pham's counsel improperly obtained copies of privileged communications between Obarr and his attorney, and used those communications to oppose another party's summary adjudication motion in this case. The trial court denied the disqualification motion because it concluded the communications were not privileged.
We reverse. After reviewing copies of the communications, the trial court concluded they were not privileged based on their content. A court, however, may not review the contents of a communication to determine whether the attorney-client privilege protects that communication. The attorney-client privilege is an absolute privilege that prevents disclosure, no matter how necessary or relevant to the lawsuit. The privilege attaches to all confidential communications between an attorney and a client regardless of whether the information communicated is in fact privileged. Accordingly, it is neither necessary nor appropriate to review a communication to determine whether the attorney-client privilege protects it.
Once the proponent makes a prima facie showing of a confidential attorney-client communication, it is presumed the communication is privileged and the burden shifts to the opponent to establish waiver, an exception,
Here, the trial court relied exclusively on the content of the communications to conclude they were not privileged and Pham points to no other evidence to support the trial court's determination. The court also concluded the communications fell with certain statutory exceptions the Evidence Code establishes for the privilege.
Although we reverse the trial court's order denying the disqualification motion, we remand for the trial court to determine whether the receipt and use of the privileged communications by Pham's counsel warrants disqualification. As explained below, the decision whether to disqualify counsel is vested in the trial court's sound discretion based on its careful balancing of a variety of factors concerning the disclosure and use of the privileged information. The court never considered those factors based on its determination the communications were not privileged.
Pham made three loans to Obarr totaling nearly $3 million, and Obarr secured each loan by granting Pham a lien on a mobile home park he owned in Westminster, California (Property). This action arose when Obarr allegedly agreed to sell the Property to two different buyers.
In March 2013, Obarr allegedly contracted to sell the Property to S.C.D. Enterprises (SCD) for $7 million based on a right of first refusal under a lease SCD held on the Property. SCD promptly assigned the purchase agreement to Westminster MHP Associates, LP (Westminster), which allegedly opened escrow on the Property with Obarr. According to Westminster, it satisfied all contingencies for the sale within 10 days of opening escrow.
Shortly after Westminster opened escrow, Obarr allegedly contracted to sell the Property to Pham for $8 million, which included the balance due on Pham's loans to Obarr. According to Pham, it opened escrow with a separate escrow company and deposited $25,000 toward its purchase of the Property a few days after contracting with Obarr. Obarr also allegedly executed a deed conveying the Property to Pham and deposited the deed with this escrow.
In April 2013, Westminster filed this action, alleging claims against Obarr for specific performance of the SCD purchase agreement, breach of the SCD purchase agreement (as an alternative to specific performance), breach of the implied covenant of good faith and fair dealing, and declaratory relief. Westminster also alleged claims against Pham and Galla for intentional interference with the SCD purchase contract, and against Pham for declaratory relief.
Obarr died unexpectedly in August 2013. The trial court appointed Cheadle as a special administrator for Obarr's estate and in that capacity substituted Cheadle for Obarr as a party to this action. Cheadle then filed a cross-complaint alleging an interpleader claim against both Westminster and Pham concerning the Property. Based on Pham's loans to Obarr, Cheadle also alleged claims against Pham for usury, intentional misrepresentation, negligent misrepresentation, money had and received, unjust enrichment, reformation, and violation of the unfair competition law (Bus. & Prof. Code, § 17200).
In July 2014, Westminster sought summary adjudication on its specific performance claim. In opposition, Pham submitted Galla's declaration that described her working relationship with Obarr and her role in his efforts to sell the Property. She also described Obarr's relationship with Kimes, when Kimes stopped representing Obarr regarding the Property's sale, and Kimes's knowledge about certain offers to purchase the Property. The exhibits Galla attached to her declaration included a September 2012 e-mail from Kimes to Obarr, and a January 2013 letter from Kimes to Obarr. Galla was copied on both communications and both clearly identified Kimes as an attorney.
The trial court heard Westminster's summary adjudication motion and Cheadle's ex parte application at the same time. The court sustained Cheadle's evidentiary objections and denied Westminster's motion without considering the January letter or the paragraph in Galla's declaration discussing it, but the court declined to decide the disqualification request on an ex parte basis and ordered Cheadle to file a noticed motion to address the issue. Cheadle filed the motion, and based on the attorney-client privilege sought to (1) exclude as evidence the September e-mail, the January letter, and three paragraphs in Galla's declaration discussing those communications; (2) disqualify Pham's counsel for obtaining and using Obarr's privileged communications; and (3) seal Galla's declaration. The trial court twice continued the hearing on Cheadle's motion to allow supplemental briefing on whether any statutory exception to the attorney-client privilege applied to the e-mail and letter.
After considering the supplemental briefs, the trial court denied the motion in its entirety because it found the attorney-client privilege did not protect the e-mail and letter. The court explained Cheadle presented evidence making a prima facie showing the e-mail and letter were confidential communications between an attorney and a client, but the court's in camera review of the communications led it to conclude the privilege did not apply because Kimes's statements in the communications suggested he was not representing Obarr concerning the potential sale of the Property, and therefore as to the Property no attorney-client relationship existed. As authority permitting it to review the e-mail and letter "to determine if [they] are privileged," the trial
The court further explained the attorney-client privilege did not apply to the e-mail and letter based on the statutory exceptions to the privilege established by sections 957, 960, and 961, which provide the privilege does not protect a communication relevant to an issue (1) "between parties all of whom claim through a deceased client" (§ 957); (2) "concerning the intention of a client, now deceased, with respect to a deed of conveyance, will, or other writing, executed by the client, purporting to affect an interest in property" (§ 960); or (3) "concerning the validity of a deed of conveyance, will, or other writing, executed by a client, now deceased, purporting to affect an interest in property" (§ 961).
Cheadle timely appealed from the court's order denying his motion to disqualify Pham's counsel.
"The question whether the attorney-client privilege applies to a particular communication is a question of fact if the evidence is in conflict." (Kerner, supra, 206 Cal.App.4th at p. 117.) "`When the facts, or reasonable inferences from the facts, shown in support of or in opposition to the claim of privilege are in conflict, the determination of whether the evidence supports one conclusion or the other is for the trial court, and a reviewing court may not disturb such finding if there is any substantial evidence to support it....'" (People v. Gionis (1995) 9 Cal.4th 1196, 1208 [40 Cal.Rptr.2d 456, 892 P.2d 1199] (Gionis).)
Cheadle contends he made a prima facie showing the e-mail and letter were confidential attorney-client communications between Obarr and Kimes,
Here, it is undisputed the e-mail and letter were communications from Kimes to Obarr, and Galla was the only other party to those communications. Cheadle submitted Kimes's declaration explaining Kimes was a licensed attorney who had an ongoing attorney-client relationship with Obarr and represented him in the sale of the Property. Kimes also explained he copied Galla on his communications with Obarr because she was Obarr's assistant and Obarr instructed him to do so. Galla's declaration also acknowledged Kimes was an attorney who represented Obarr on various legal matters and she received communications from Kimes on Obarr's behalf about those matters.
Consequently, "it is neither customary nor necessary to review the contents of the communication in order to determine whether the [attorney-client] privilege applies...." (Cornish v. Superior Court (1989) 209 Cal.App.3d 467, 480 [257 Cal.Rptr. 383] (Cornish).) A court's determination on whether the privilege applies "does not involve the nature of the communications or the effect of disclosure but rather the existence of the relationship at the time the communication was made, the intent of the client and whether the communication emanates from the client." (Ibid.; see Costco, supra, 47 Cal.4th at p. 739 ["because the privilege protects a transmission irrespective of its content, there should be no need to examine the content in order to rule on a claim of privilege"].)
The trial court justified its in camera review by citing the OXY decision. In OXY, the Court of Appeal crafted an exception to section 915 and its prohibition against in camera review when the review is necessary to determine whether there was a waiver of the claimed privileged or whether an exception to the privilege applied. (OXY, supra, 115 Cal.App.4th at
More importantly, this aspect of OXY is no longer good law after the Supreme Court's Costco decision. In Costco, the court explained the in camera review the OXY court ordered was not appropriate because "section 915 prohibits disclosure of information claimed to be privileged in order to determine if a communication is privileged." (Costco, supra, 47 Cal.4th at p. 740.) The Costco court explained, "after the court has determined the privilege is waived or an exception applies generally, the court to protect the claimant's privacy may conduct or order an in camera review of the communication at issue to determine if some protection is warranted notwithstanding the waiver or exception." (Ibid.) A review, however, may not be conducted for any reason until the court determines the privilege does not apply or has been waived. (Ibid.)
Pham contends the trial court was allowed to review the e-mail and letter because Galla had publicly disclosed the communications when she provided Pham copies of the communications and Pham filed them with the court in opposition to Westminster's summary adjudication motion. According to Pham, "section 915 does not prevent consideration of a privileged communication that has already been disclosed."
The trial court therefore was not permitted to review the contents of the e-mail and letter, and the court's ruling they were not privileged attorney-client communications must stand or fall based on other evidence in the record. Pham, however, points to no other evidence showing the e-mail and letter were not confidential communications between an attorney and a client made during the course of the attorney-client relationship. In contrast, prima facie evidence supports the existence of an attorney-client relationship between Kimes and Obarr.
Other than her summary of the e-mail and letter, nothing in Galla's declaration definitively shows Kimes did not represent Obarr regarding the Property's sale. Moreover, Galla's declaration acknowledged Kimes represented Obarr on a number of legal matters, and therefore acknowledged an attorney-client relationship existed between Obarr and Kimes. Galla's declaration also attached an April 2013 letter from Kimes to John Defalco, stating Kimes represented Obarr on the Property's sale and Obarr instructed him to contact Defalco to inquire whether he would match the current offer to purchase the Property. Galla and Pham do not address this letter. Thus, Pham
Cheadle contends the trial court erred in ruling the statutory exceptions to the attorney-client privilege established by sections 957, 960, and 961 excluded the e-mail and letter from protection. We agree.
Section 957 provides the attorney-client privilege does not apply "to a communication relevant to an issue between parties all of whom claim through a deceased client, regardless of whether the claims are by testate or intestate succession, nonprobate transfer, or inter vivos transaction." Pham contends this exception applies because both it and Westminster claim to be owners of the Property through separate inter vivos transactions with Obarr, and the communications between Obarr and Kimes are relevant to whether Obarr intended to sell the Property to SCD (and therefore Westminster) or Pham.
In 2009, the Law Revision Commission again examined this exception when the Legislature directed the commission to study application of the attorney-client privilege after a client's death. (Recommendation: Attorney-Client Privilege After Client's Death (Feb. 2009) 38 Cal. Law Revision Com. Rep. (2008) p. 166.) In recommending the Legislature clarify that this exception applies to nonprobate transfers, the commission further explained the exception's purpose and application: "The exception is based on the assumption that a decedent would have wanted the attorney-client communication disclosed in litigation between the decedent's beneficiaries (as opposed to litigation in which a third party, such as a creditor, claims against the decedent). Such disclosure helps to ensure the client's intent regarding disposition of the client's assets `might be correctly ascertained and carried out.'" (Id. at p. 196, fn. omitted; see Fletcher v. Superior Court (1996) 44 Cal.App.4th 773, 779 [52 Cal.Rptr.2d 65], quoting Clark v. Second Judicial Dist. Court (1985) 101 Nev. 58, 62 [692 P.2d 512] ["`"in a suit between devisees under a will, statements made by the deceased to counsel respecting the execution of the will, or other similar document, are not privileged. While such communications might be privileged, if offered by third persons to establish claims against an estate, they are not within the reason of the rule requiring their exclusion, when the contest is between the heirs or next of kin"'" (italics omitted)].)
This case presents a hybrid situation involving claims both through and against the deceased client and his estate. Westminster and Pham each claim title to the Property through Obarr based on separate inter vivos transactions with Obarr, but both also assert adverse claims against Obarr's estate seeking monetary damages based on Obarr's contract to sell the Property to the other buyer. Westminster's complaint alleged claims against Obarr's estate for specific performance, breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief. It seeks monetary damages and attorney fees against the estate even if Westminster succeeds on the specific performance claim. Pham's cross-complaint similarly alleged claims
Based on these adverse claims seeking affirmative relief against Obarr's estate beyond simply resolving to whom he intended to sell the Property, we conclude section 957's exception to the attorney-client privilege does not apply here. If the otherwise privileged communications between Obarr and Kimes are not protected by the privilege, then the parties will use the communications both to identify to whom Obarr intended to sell the Property and to establish a claim for damages against Obarr's estate. For example, if one of the communications showed Obarr intended to sell the Property to SCD (and therefore Westminster), then Pham would use that communication to show Obarr's estate was liable for inducing Pham to purchase the Property after Obarr already had sold it. That result is inconsistent with the exception's purpose.
As explained above, the Legislature based this exception on the reasonable assumption the deceased client would want privileged communications disclosed to ensure distribution of the client's estate was consistent with the client's wishes. In that context, the court is confronted with gifts of property that would not result in potential liability for the deceased client's estate. Unlike here, that situation does not involve a sale of property that may result in liability for the deceased client's estate.
The underlying rationale for section 957 does not apply to claims against the deceased's estate because it does not necessarily follow that a client would want his or her privileged communications disclosed when disclosure may expose the estate to liability. Moreover, when, as here, there are allegedly two arm's length transactions involving the sale of property, as
Of course, a deceased client's personal representative could waive the attorney-client privilege for certain communications if the representative determines doing so would be in the best interest of the client's estate. (§§ 912, 953 [deceased client's personal representative is holder of privilege with standing to waive it].) That waiver, however, would be made during the litigation based on a careful determination of whether disclosing a particular communication would serve the client's best interest. In contrast, applying the exception in this situation would result in a wholesale exclusion of an entire category of communications from the attorney-client privilege without any analysis or consideration of whether doing so would serve the client's best interests or ensure the client's wishes were carried out. The underlying rationale for the exception does not support its application in this situation.
Sections 960 and 961 establish two related exceptions to the attorney-client privilege concerning a deceased client's writing affecting an interest in property. Section 960 provides the privilege does not apply to "a communication relevant to an issue concerning the intention of a client, now deceased, with respect to a deed of conveyance, will, or other writing, executed by the client, purporting to affect an interest in property." Section 961 states the privilege does not apply to "a communication relevant to an issue concerning the validity of a deed of conveyance, will, or other writing, executed by a client, now deceased, purporting to affect an interest in property."
This comment reveals the purpose of these exceptions is to allow an attorney to provide testimony about a client's intention regarding any instrument affecting an interest in property in the same way the exception codified in section 959 allows an attorney to testify about a client's intention about an attested document on which the attorney served as an attesting witness. The Law Revision Commission Comments to section 959 make clear this narrow exception is limited to the types of communications to which an ordinary attesting witness would testify, rather than a wholesale exception for all communications concerning the attested document or related transaction: "This exception relates to the type of communication about which an attesting witness would testify. The mere fact that an attorney acts as an attesting witness should not destroy the lawyer-client privilege as to all statements made concerning the document attested; but the privilege should not prohibit the lawyer from performing the duties expected of an attesting witness." (Cal. Law Revision Com. com., 29B pt. 3A, West's Ann. Evid. Code, supra, foll. § 959, p. 392.)
Based on the comments of the Law Revision Commission, we conclude the exceptions do not apply to Kimes's e-mail and letter to Obarr because there is no showing those communications are the type of communications about which an attesting witness would testify. The e-mail is dated September 2012, and the letter is dated January 2013, but Obarr did not allegedly enter into the purchase agreement with SCD until March 2013, or the purchase agreement with Pham until April 2013. At most, the e-mail and letter therefore would reflect general information about Obarr's intent concerning the Property's sale months before he executed either purchase agreement, rather than the sort of information an attesting witness would have about the purchase agreements and their execution.
Applying these exceptions with the breadth Pham advocates would essentially eliminate the privilege for all communications relating to the underlying
Moreover, Pham contends Kimes had no role in the negotiation and execution of either of the purchase agreements, and therefore Pham made no showing Kimes would have any information about these agreements and their execution. As the party asserting an exception to the attorney-client privilege, Pham bore the burden to show the exception applied. (Venture Law Group v. Superior Court (2004) 118 Cal.App.4th 96, 102 [12 Cal.Rptr.3d 656].)
Although the trial court did not rule on its waiver argument, Pham contends we should affirm the trial court's ruling on the ground Obarr and Cheadle waived the attorney-client privilege. Pham posits three separate waiver theories, but fails to adequately support any of them with legal authority, argument, and evidence.
Second, Pham claims Obarr waived the privilege by freely authorizing Galla and others to share communications about the Property's sale with third parties. As an example, Pham contends the evidence showed Galla sent the January 2014 letter at issue to the escrow company for Westminster's purchase of the Property. Pham's record citation, however, is to one of its opposition briefs rather than to any evidence in the record. An exhibit to that brief appears to be an e-mail from Galla to the escrow company, but there is no declaration or other testimony to authenticate or otherwise explain the e-mail, and Pham therefore forfeited this claim as well. (Century Surety Co. v. Polisso (2006) 139 Cal.App.4th 922, 956 [43 Cal.Rptr.3d 468] [failure to cite supporting evidence in record forfeits claim].)
Cheadle contends we must disqualify Pham's counsel because he improperly obtained Obarr's attorney-client privileged communications from Galla, carefully reviewed and analyzed the communications, and used them to oppose Westminster's summary adjudication motion without notifying Cheadle and giving him an opportunity to prevent disclosure. We remand for the trial court to decide the disqualification issue because the court never resolved the matter based on its conclusion the e-mail and letter were not privileged. As we explain, this issue is vested in the trial court's sound discretion in the first instance.
Specifically, "[w]hen a lawyer who receives materials that obviously appear to be subject to an attorney-client privilege or otherwise clearly appear to be confidential and privileged and where it is reasonably apparent that the materials were provided or made available through inadvertence, the lawyer receiving such materials should refrain from examining the materials any
The failure to comply with these obligations may justify counsel's disqualification, but does not automatically require it. (Rico, supra, 42 Cal.4th at p. 819; State Fund, supra, 70 Cal.App.4th at p. 657.) "`"[M]ere exposure"' to an adversary's confidences is insufficient, standing alone, to warrant an attorney's disqualification." (Rico, at p. 819; see State Fund, at p. 657.) Instead, the court must consider the totality of the circumstances surrounding the receipt, review, use, and impact of the disclosed privileged information, with "`the means and sources of breaches of the attorney-client confidentiality... be[ing] important considerations.'" (State Fund, at p. 657; see Rico, at p. 819.)
Here, the trial court never undertook the careful balancing of competing interests required to determine Cheadle's request to disqualify Pham's counsel because the trial court concluded the e-mail and letter were not privileged, and therefore no basis for disqualifying Pham's counsel existed. As explained above, the trial court erred in concluding the e-mail and letter were not privileged attorney-client communications. The foregoing standards regarding the inadvertent disclosure of these privileged communications apply because there was no showing either Obarr or Cheadle intended to disclose these communications to Pham or anyone else.
We decline to decide the disqualification issue, and instead remand for the experienced trial judge to determine the issue based upon her superior knowledge of the underlying facts and the impact of this disclosure on the case. In doing so, the trial court should not consider any information it acquired from its review of the e-mail and letter. Rather, the court should limit itself to nonprivileged information it received from the parties about the communications and their impact on the action. Nothing about the attorney-client privilege, however, prevents the court from considering, or requiring disclosure of, any information not derived from an examination of the privileged communications, such as facts relating to who holds the privilege, whether an attorney-client relationship existed at the time of the communications, and whether the client intended the communication to be confidential. (See Costco, supra, 47 Cal.4th at p. 737.) For example, Galla may testify about the circumstances surrounding the communications and the attorney-client relationship between Obarr and Kimes provided she has personal knowledge of these facts and does not disclose any privileged information or any information she gained from reviewing a privileged communication. Of course, as the holder of the attorney-client privilege, Cheadle may ask the court to conduct an in camera review of the communications (or consider the communications in deciding the disqualification issue) if he believes it is necessary for a proper determination of that issue. (See id. at pp. 738-740.) By providing this guidance and remanding the matter to the trial court, we express no opinion concerning whether the facts and circumstances surrounding the disclosure and use of the e-mail and letter warrant disqualification in this case.
The order is reversed and remanded for further proceedings consistent with this opinion. Cheadle shall recover his costs on appeal.
Rylaarsdam, Acting P. J., and Bedsworth, J., concurred.